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House Republican wants to know if Treasury tried to influence Standard & Poor's U.S. credit outlook

April 28, 2011 | 8:53
am

A key member of the House Financial Services Committee wants to know whether Treasury Secretary Timothy F. Geithner or other department officials tried to convince Standard & Poor's not to downgrade its credit outlook for the U.S.

Rep. Randy Neugebauer (R-Texas), chairman of the panel's Oversight and Investigations Subcommittee, wrote to Geithner on Wednesday asking for any documents related to S&P's report last week warning that the nation's AAA credit rating was in danger because of the huge budget deficit.

Neugebauer said his letter was spurred by a Washington Post article last week that quoted unnamed sources as saying the Obama administration privately urged S&P not to lower its credit outlook for the U.S. Because of that report, Neugebauer requested any internal memos, emails or other records related to communications between Treasury and S&P before the report was issued.

"I write to inquire about the Department's involvement in seeking to influence, alter or amend S&P's ratings outlook for the United States," Neugebauer wrote in the letter, which was first reported by the Post. "While it may be commonplace for companies and governments that solicit ratings to 'push back' when they don't agree with decisions made by credit ratings agencies, the appropriateness of the federal government protesting ratings changes is a bit more ambiguous given its regulatory and oversight roles over the agencies."

Treasury has until May 6 to provide the documents to the subcommittee. Treasury officials did not respond to a request for comment.

Neugebauer also complained that Geithner was not doing more to address the budget deficit and chided him for downplaying the risk that the U.S. credit rating actually would be downgraded. Following the release of the S&P report, Geithner said S&P was too pessimistic about the ability of the Obama administration and congressional Republicans to take major steps to reduce the deficit.

"I am worried that the Treasury Department under your leadership may not be sufficiently concerned with our ballooning national debt and deteriorating financial condition," Neugebauer wrote.